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How to get Investment for a Business

When you are starting up a new business the sticking point will usually be finding the necessary investment to enable it to happen. You will already have had the idea, presumably, and will have worked out the logistics and researched the market to ensure that the proposition is viable.

But most businesses will require starting capital. Bearing in mind that the object of the exercise will usually be to make money that you don’t currently have, consideration will need to be given as to how to get investment for a business from external sources. After all if you don’t have savings or resources of your own, it will clearly need to come from somewhere else.

If a business start-up grant is not available – and they are notoriously difficult to secure - one obvious option is to take out a business loan. In today’s economic climate in particular, interest payments on a loan are likely to cost you much less than offering a share in your business to an outside investor. By taking a business loan you retain absolute personal control over your business and the repayments can be staggered over many years and as such are unlikely to be prohibitive.

But a business loan is not for everybody. Without security the kind of investment that you need may not be forthcoming from a bank or building society, particularly in the wake of the credit crunch. It may well be the case that you will need external investment whether it is your preferred option or not.

One way of achieving external investment may be to take on a business partner. There are many models on which a partnership could operate, but essentially they boil down to two – an equal, participative partnership or one in which one partner invests the capital and the other performs the hard graft. In the former case both you and your partner (or partners) will invest an equal amount of capital into the business and will share the physical work. In the later case the partner is in fact simply investing his or her cash into your hard labour.

Another line of approach you may wish to consider when trying to work out how to get investment for a business is to seek out the support of a “business angel”. This is a concept that has fairly recently been made famous by its coverage on television by the likes of Dragon's Den, but it is one that has actually been in existence for quite some time. Essentially there are people in the market with large quantities of ready capital that they are prepared to invest in the works of others in exchange for a cut of the business, agreed in advance between both parties.

It will be your task to convince the business angel that your project is worth supporting so much preparation is needed prior to approaching a business angel or angel investor. Check out the above investment sites to learn more about getting an investment for your business.

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